Keystone decision pushed back

The Obama administration on Friday extended its review period for the Keystone XL pipeline, potentially delaying a decision on the project until after the midterm elections.

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With just 14 days left in a 90-day review, State Department officials said they were stopping the clock due to litigation in Nebraska over the pipeline's proposed route.

State declined to provide a specific timeline for restarting the review process, effectively putting the project in limbo.

The delay could disarm a political land-mine for President Obama, who had found himself caught between rival factions of his Democratic base.

While Keystone has significant support from industry groups and some labor unions, it is staunchly opposed by environmentalists, who say its approval would be a betrayal and a stain on the president's climate change legacy.

Those dynamics made the Keystone decision a lose-lose situation for the White House, with any decision bound to alienate core supporters that Democrats need to turn out this fall.

The pipeline is a project of the developer TransCanada and would carry oil sands from Canada to Gulf Coast refineries.

A senior State Department official said that while the agency is essentially freezing the review process to wait for more information on the situation in Nebraska, it may start the clock back up before the state's supreme court makes a ruling.

"We don't want to exclude the possibility of ways of getting a better understanding of what that route might be before there is a final decision by the Nebraska Supreme Court. We want to be open and flexible to any changes and information and circumstances that could allow us to move more expeditiously," the official said.

When questioned on the administration's decision to place the process on hold, the State official said there was no deliberate "intent to delay the process."

The official said the decision was not political, but an effort to "prudently" recognize possible changes in the existing pipeline route and assess the environmental and socioeconomic implications.

"All of us would prefer to be in a position where we have the certainty of an exact timeline," the official said.

The official said the department, when it deems the time is right, will notify the eight agencies that are submitting comments that they are on the clock again, at which point in time they would have only 14 days remaining to send in their comments.

Green groups cheered State's announcement and took credit for the delay.

"This decision shows the power of the movement against the Keystone XL pipeline by the people of Nebraska and activists all across the country," said Ross Hammond of Friends of the Earth. "This delay shows that TransCanada will not succeed in bullying their way to approval, bypassing established democratic procedures."

Supporters of the project bemoaned the setback, which added yet another delay to a project that was first proposed in 2008.

Canadian Prime Minister Stephen Harper, who strongly supports Keystone and has lobbied Obama to approve it, said he was disappointed that "politics" had affected the process.

"This project will create tens of thousands of jobs on both sides of the border, will enhance the energy security of North America, has strong public support, and the U.S. State Department has, on multiple occasions, acknowledged it will be environmentally sound," said Jason MacDonald, Harper's director of communications.

"There are no credible reasons to block this pipeline even one day more, and the House will continue to press the administration to move forward so we can put Americans back to work and strengthen our energy security.”